Skip to content skip to secondary navigation Top of the page

and events

Media coverage

Please note that the articles contained in this section of the website have been selected from articles published by the media. The facts and opinions expressed therein are those reported by the journalist and publication and therefore may not necessarily reflect those reported by the Company.

Harmony Gold looks forward to being debt free

Publication: Mining Weekly
Journalist: Martin Creamer

South Africa’s Harmony Gold is hankering for the days when it will be free of debt.

Harmony CEO Graham Briggs foresees that happening by the middle of next year.

“We’ll be a different company,” he says, able to contemplate not only further organic growth, but also acquisitive growth.

CFO Frank Abbott forecasts that Harmony’s net debt will be down to R224-mil- lion by the end of June, from R2,3-billion in the September quarter.

“We see our decreasing debt as a major advantage, and we plan to get it down to a very low level in June and that’s when, we think, we will be in a good position to do something acquisitive,” Briggs says.

He adds that there are currently “loads and loads” of gold-company acquisition “opportunities out there” as gold juniors battle with financial constraints.

Harmony is considering going onto sites to carry out its due diligence studies, and the company has an appetite for looking into the acquisition of stressed assets both in South Africa and abroad.

While it is “very good” to be in the gold-mining industry in South Africa, rand gold prices have reached record levels and a weakening rand makes South Africa a good place to operate. Briggs says the company is only out to acquire long-life quality mines at home, as it has had its fair share of “dogs” in the past.

Briggs is also bullish about the gold price in dollarised countries and will thus be casting an international eye to “hunt out” potential acquisitions.

The company reached its target of 12,3 t – some 400 000 oz – of gold this quarter, up 6%, and with 4% better grade.

Masimong was the star performer and Elandsrand was in “intensive care” in the September quarter. What to do with the troubled Target gold mine will be decided in the next six months, but it is not a candidate for disposal.

Cash operating costs were up 9% in rand terms for the quarter to the end of September, mainly owing to increased electricity and labour costs.

Cash operating profit was down by 19% at R808-million.

Cash costs for the quarter were R151 827/kg – or $607/oz – and the operating margin 30%.

Masimong’s team-training efforts have paid off, Briggs says, which has resulted in the Free State mine having not only the highest productivity level of 144 g/employee and also attaining the targeted 125 t/employee, but also the best safety record.

Masimong produced 44% more gold than in the previous quarter, totalling 1 272 kg, and going down to a cost level of R132 000/kg.

“This is the sort of example we would like to have on some of our other operations as well,” Briggs says.

Elandsrand, by contrast, failed to attain the productivity target of 125 t/employee and the best it could do was just over 100 t/employee.

Harmony’s Alwyn Pretorius is currently devoting 100% of his time to Elandsrand, in order to improve the safety and production.

The Target mine was another of the poor performers, and underwent a complete management change in the September quarter.

“We have a six-month turnaround plan there,” Briggs reports.

Harmony’s Virginia operations contributed the most in kilogram terms, representing 18% of the total number of kilograms produced for the September quarter, with the Phakisa operation, which is still in ramp-up phase, the lowest, at 1%.

The Bambanani mine, on a new plan, also did well after a “severe” restructuring, producing 18% more gold at 1 188 kg. This big electricity consumer failed to lower its cost per kilogram.

The Joel mine had a difficult quarter, but had a slight increase in grade, and stopes were being re-entered after a seismic event.

The Tshepong mine, a big gold contributor, improved in grade, but decreased in volume.

Evander had a good, steady performance and production showed build-up at Doornkop, but the discon- tinuing Randfontein had a poor quarter.

Surface operation Kalgold has been performing “very well”, but there has been a “slight” volume decrease at the tailings retreatment operation in the Free State, following contractor strike action.

Papua New Guinea

Hidden Valley, in Papua New Guinea, is on schedule to produce its first gold in June.

“We have moved about 8,5 million cubic metres so far this year, which puts us on target with stripping,” says Briggs.

Being constructed are the carbon-in-leach plant and semiautogenous mill.

Exploration studies are under way at Wafi-Golpu, together with Harmony’s partner, Newcrest, of Australia.

Trenching has been done next to Hidden Valley’s openpit, and the gold grades in the trenches have been as high as 19 g/t.

Annual report

Integrated annual report 2016
Integrated annual report 2017


Investor brief

Harmony Investor brief, Sep 2017
September 2017 -
Harmony Investor brief

(PDF - 6.5MB)

Register for alerts